Banex Nicaragua Definitive Closure

The banking regulator has requested shareholders to begin the liquidation process of the financial institution.

The head of Nicaragua's Banking and Finance Regulator (SIBOIF), Víctor Urcuyo, has said that the decision does not impact on the bank's customers since, "the vast majority have already received their money".

La Prensa reports comments from the Nicaraguan Central Bank's president, Antenor Rosales: "The social contract will be disolved, assets liquidated and the company's register deleted. The subsequent liquidation process should take longer than a year".

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The Nicaraguan Association of Micro-Finance Institutions (ASOMIF) has offered to assist in the recovery of Banex.

Alfredo Alaniz, ASOMIF's executive director, commented that in meetings held with Nicaragua's banking regulator and central bank authorities those present agreed on the need for the institution to continue its operations whether as a bank or as a finance company.

The move will mean the closure of 10 branches and the loss of 50% of its staff.

Benjamín Vides, Chairman of the bank’s board of directors, indicated that the return of customers’ deposits forms part of this process since, according to Guatemalan legislation, a lending institution cannot hold deposits.

The bank closed 5 branches, while it awaits a potential $32 million recapitalization.

The banking superintendence (Siboif), gave “Banco del Exito” (Banex), until June 30 to confirm this second capitalization. Meanwhile, the bank closed branches in Granada, Ocotal, Bonanza, Rosita and Siuna.